Commonwealth Bank vs BHP: Which ASX blue chip is the better buy in October?

Commonwealth Bank of Australia vs BHP Group Ltd shares

If you’re keen on ASX blue chips, chances are you’ve looked at Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP). They’re both among the nation’s most valuable companies, but come from wildly different corners of the economy: one’s a financial powerhouse, the other a global mining giant. So which offers the better proposition for Aussie investors as we head into October? Here’s what I’ve found digging into their latest numbers.

The case for Commonwealth Bank of Australia

As one of Australia’s “big four” banks, Commonwealth Bank of Australia is about as iconic as it gets on the ASX. With roots stretching across Australia and into New Zealand, the UK, the US, and Asia, CommBank offers a comprehensive range of financial services—from everyday banking to wealth management, insurance, and broking. It holds a top spot for market capitalisation (in the banking sector) and customer base locally.

From the latest data, I noticed a few standout fundamentals:

• Market cap: $253.56 billion—immense, even among banking peers.
• P/E ratio: 23.14—suggesting investors are willing to pay a premium compared to many other blue chips, though it’s worth remembering banks’ valuations often differ from sectors like resources.
• Dividend yield: 3.35%, with dividends 100% franked and a robust record of consistent, fully-franked payouts over decades. The most recent dividend was $2.70 per share (final), with an interim of $2.35 earlier this year.

CBA’s brand recognition and broad financial reach are major moats, and its dividend reliability makes it a favourite among income-seeking investors.

The case for BHP

BHP is a global heavyweight in resources, with roots going back centuries. Once known as BHP Billiton, it’s now streamlined to a single ASX listing. The company digs up and sells a range of core commodities: iron ore, copper, coal, and more. As commodity prices shift, so too does BHP’s share price—so you get a different risk profile with this stock compared to the big banks.

A few key data points jumped out to me:

• Market cap: $304.03 billion—BHP actually edges past CBA here, making it the largest ASX-listed giant in this comparison.
• P/E ratio: 22.11—slightly below CBA’s, though I’d note sector comparison between mining and banking is far from apples-to-apples.
• Dividend yield: 3.98%, also 100% franked. BHP’s dividends sometimes swing with profit cycles, but its recent payouts remain substantial: its last final dividend was $1.38 per share, with a $1.04 interim earlier this year.
• Year-to-date (YTD) return is a massive 38.8%, driven up by the latest commodity boom and strong operational delivery.

BHP’s company description highlights its sensitivity to commodity prices, a double-edged sword—potential for big gains in strong years, but risks if global demand wobbles.

Valuation comparison

Here’s how the numbers stack up side by side:

Note: Both companies report similar P/E ratios, though these aren’t strictly comparable with each other due to the different sectors they operate in. Yield-wise, BHP edges out CBA on dividend, though this can vary considerably year to year for miners.

Recent share price performance

Comparing recent share price activity up to 25 September 2026:

• Commonwealth Bank of Australia closed at $150.83 on 25 Sep 2026, with a year-to-date return of -2.9%. Over the last week in the data, CBA’s price wobbled, experiencing several days of negative moves after a long period above $150.
• BHP Group closed at $60.72 on 25 Sep 2026, with a year-to-date return of 38.8%. Its share price has surged over the year, though like many resource stocks, recent daily moves bounced around—up one day, down another, with a slight negative in the last session displayed.

Which is the better buy?

If I’m weighing up between these two blue chips for October, my pick would be BHP Group. Here’s why: the current data shows BHP outpacing CBA on this year’s return by a massive margin, and it’s also offering a higher 3.98% fully-franked yield compared to CBA’s 3.35%. Both companies show strong dividend records and full franking, but BHP’s recent price momentum and sector tailwinds, driven by strong commodity prices, tip the balance for me right now.

Of course, with BHP, you are exposed to the swings of the global commodity cycle, so you have to be comfortable with a bumpier ride than you’d get from a major Australian bank like CBA. CommBank remains a reliable income stock and will always deserve a place in any ASX blue chip conversation, but at this snapshot in time—with sector differences acknowledged—I think the stronger momentum and yield favour BHP.

The post Commonwealth Bank vs BHP: Which ASX blue chip is the better buy in October? appeared first on The Motley Fool Australia.

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• 7 ASX mining shares with 11% to 158% upside ahead: experts
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• Sell alert! Expert calls time on Corporate Travel and CBA shares

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.